MTX
MEMTX
MTX - Metorex Limited - Operational update and further cautionary
METOREX LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1934/005478/06)
Share code: MTX
ISIN: ZAE000022745
Issuer code: MEMTX
("Metorex" or "the Company")
Operational Update and Further Cautionary Announcement
Metorex, the diversified mining group listed on the JSE Limited,
wishes to inform shareholders and update the market on:
* Quarterly Production and Sales Statistics;
* Ruashi Mining sprl ("Ruashi") Resources and Reserves;
* Black Economic Empowerment at Vergenoeg Mining Company
(Proprietary) Limited
("Vergenoeg");
* Chibuluma Mines plc ("Chibuluma") Debt Restructuring;
* Consolidated Murchison Mine ("Consolidated Murchison") Hedge
Losses;
* Progress with Metorex`s Asset Disposal Strategy;
* Copper Resources Corporation ("CRC"); and a Further
Cautionary Announcement.
Chief Executive Officer Terence Goodlace said; "Metorex continues
to advance a strategy to ensure survival in the current economic
climate. This includes our decisive asset disposal strategy and
an intense focus on the Ruashi project production ramp up. We
continue to upgrade our technical and operational expertise and
at present are conducting intensive reviews of operational
performance and rolling out best practice mineral resource
management processes as one of the fundamental steps in our
strategy to turn the Company around."
Table 1: Metorex quarterly production statistics:
Commodity Uni 3 Months 3 Months 3 Months
t ended ended ended
March 2009 December September
(Q3) 2008 2008
(Q2) (Q1)
Copper - (t) 3 848 4 226 3 887
Chibuluma
Copper - Sable (t) 549 1 302 1 933
Copper - Ruashi (t) 2 919 1 754 461
(t) 7 316 7 282 6 281
Copper - subtotal
Cobalt - Sable (t) 13 86 49
Cobalt - Ruashi (t) 152 0 0
(t) 165 86 49
Cobalt - subtotal
Fluorspar (dm 37 908 45 301 39 541
(acidspar) t)
Gold * (kg 83 86 148
)
Antimony (mt 35 692 66 302 84 069
u)
* Gold production only includes the production from Consolidated
Murchison. Pan African Resources Plc is not included as it is a
separately listed entity and it does not publish quarterly
results.
Table 2: Metorex quarterly sales statistics:
Commodity Unit 3 Months 3 Months 3 Months
ended ended ended
March 2009 December September
(Q3) 2008 2008
(Q2) (Q1)
Copper - (t) 4 009 3 980 3 869
Chibuluma
Copper - Sable (t) 496 1 917 2 054
Copper - Ruashi (t) 3 029 1 509 514
(t) 7 534 7 406 6 437
Copper - subtotal
Cobalt - Sable (t) 10 150 87
Cobalt - Ruashi (t) 0 0 0
(t) 10 150 87
Cobalt - subtotal
Fluorspar (dmt) 27 760 35 926 49 621
(acidspar)
Gold** (kg) 78 103 139
Antimony (mtu) 43 368 18 246 112 359
** Gold sales only include the sales from Consolidated Murchison.
Pan African Resources Plc is not included as it is a separately
listed entity and it does not publish quarterly results.
Commentary on production and sales for the quarter ended 31 March
2009
Copper production increased 0.5 per cent to 7 316 tons and copper
sales by 1.7 per cent to 7 534 tons. This was driven largely by
increased production out of Ruashi offset by a reduction at Sable
as a direct result of a lack of third party ore. The tonnage
milled at Ruashi increased by 40 per cent to 143 000 tons at an
average blended copper head grade of 2.63 per cent and a blended
cobalt head grade of 0.59 per cent. Tonnage feed was made up of
ore from the open pits, stockpiles and old tailings facilities.
The Ruashi mill circuit was affected by a 10-day planned shut
down for re-lining and this had an effect on tonnage throughput.
Ruashi continues to improve output and it is pleasing to report
that the mine produced 1 500 tons of copper in April 2009 in line
with actions that have been aimed at increasing plant
availabilities and debottlenecking key areas of the metallurgical
process. Chibuluma tonnage volumes decreased for the quarter as
a result of a safety and mining cycle review which necessitated
the curtailing of certain workings and completely waste-filling
mined out areas adjacent to current workings and this affected
copper production negatively. This void filling process is now
completed.
Cobalt production increased by 92 per cent to 165 tons. Cobalt
production at Ruashi continues to ramp up as does the quality of
the product. For the month of April 2009 Ruashi produced 150
tons of contained cobalt at a quality which is approaching
specification requirements. Cobalt sales declined as a result of
timing differences and offtake continues to be encouraging.
Fluorspar production decreased as a result of a drive to produce
a higher quality product which is low in impurities and as a
result of power outages. Tonnage throughput remains at 150 000
tons per quarter and feed grades are consistent at 40 per cent
CaF2, however acidspar recoveries have reduced from 73 to 63 per
cent as a result of the new magnetic separation circuit
commissioned during the December 2008 quarter. The magnetic
separation reduces iron contamination in the concentrate and thus
upgrades poorer quality ore to meet customer requirements. The
market for fluorspar remains tight and at present Vergenoeg
acidspar sales have not yet been fully committed for the 2009
calendar year. Marketing opportunities are being pursued to take
advantage of our cost competitiveness and continually improving
acidspar quality.
Gold production at Consolidated Murchison was affected for the
reasons mentioned below.
Antimony production declined due to the scaling back of
operations, reduced output from the Beta shaft and poor
recoveries at Consolidated Murchison. The Beta shaft winder was
affected by a lightning strike during January 2009. This was
rectified during March 2009. The poor recoveries for the quarter
were primarily a result of a breakdown of one of the primary
mills in the circuit as well as the high level of plant
stoppages. The re-opening of the Beta shaft along with full mill
availability will improve production. Consolidated Murchison is
implementing a turn-around plan in an attempt to stave off
closure. Sales of antimony have improved on the back of
increased demand and improved pricing.
Ruashi Resources and Reserves
The Ruashi Mineral Resource was restated in the Metorex Annual
Report for the twelve months ended June 2008 based on a
remodeling exercise conducted in 2007. Geological risk inherent
in the Ruashi model remains of such a nature that the resource
was classified as no higher than `Indicated` as per SAMREC Code
definitions.
In January 2009, Ruashi commenced an infill reverse circulation
("RC") drilling programme focusing on shallow mineralisation of
the northern portion of the Ruashi 1 pit in order to improve
confidence in the geological and orebody interpretation and to
enable moving the Ruashi 1 resource into a `Measured` category.
In summary, 47 RC holes were completed for a total of
approximately 1 620 meters. Final assay results from this
programme are pending and should be returned within the next
month.
Additionally, a diamond core drilling programme of 5 160 metres
commenced in the first week of April 2009 targeting areas of low
confidence in the geological interpretation and grade estimation
of the Ruashi 1, 2 and 3 pit resources. Shallow holes of about
100 metres will test the southern portions of the Ruashi 1 and 2
pits, followed by deeper holes in the Ruashi 3 resource to
improve geological boundary definition and to further validate
historical assay results in the overall Ruashi database.
Drilling completion is targeted for end of June 2009 with core
logging, sampling and assay activities running concurrently.
Completion of an updated, geologically constrained resource
model, `whittle pit optimisation`, mine design and schedule is
planned for completion by mid August 2009. The full cost of the
entire programme is estimated at US$1.88 million.
The urgency of this project is driven by a need to gain certainty
in the short-term plan and to review the mine design using
revised copper and cobalt consensus forecast prices to limit
possible unnecessary overburden stripping. Additionally, it will
provide a foundation for reviewing the medium term ramp up and
the Ruashi Ore Resource and Mineral Reserve Statement as at 30
June 2009, as required by JSE reporting regulations.
Black Economic Empowerment at Vergenoeg
Metorex received a cash offer from a Black Economic Empowerment
company for a 15% equity interest in Vergenoeg. The offer is
conditional upon completion of a due diligence review and the
necessary regulatory approvals. The transaction should become
unconditional in early June 2009. A detailed announcement
setting out the terms of the transaction will be made as soon as
a final agreement has been concluded.
Chibuluma Debt Restructuring
Chibuluma has a US$36 million term loan with Standard Chartered
Bank ("the debt facility") and we are pleased to report that the
debt facility agreement has been successfully restructured. The
first installment has been deferred from 31 March 2009 to 30
September 2009 and the facility is repayable over 9 semi-annual
installments.
Consolidated Murchison`s Hedge Losses
Consolidated Murchison`s historic gold hedging contract losses
have been crystallised at R41million, down from a level of R52
million previously reported. This debt will now be repaid on 30
November 2009.
Progress with Asset Disposal Strategy
Metorex is progressing with its drive to dispose of certain
assets within its portfolio. The objective is to generate
sufficient liquidity for purposes of its near-term debt
commitments whilst funding the Ruashi project during its ongoing
build-up phase.
Further announcements will be made as and when respective
disposals are concluded.
CRC
CRC pursued a rights offer to all existing shareholders in order
to provide CRC with working capital. In addition to a very small
number of shareholders, Metorex participated in the rights offer
by converting a portion of its loan to CRC into equity which
resulted in it holding in excess of 87% of the enlarged issued
share capital of CRC. The rights offer failed to inject
sufficient fresh capital into CRC. An equity partner is being
sought for this project.
Metorex announced on 30 April 2009 that it has sought legal
advice on its position as a member of CRC and based on this
advice Metorex has commenced legal proceedings against Central
African Mining & Exploration Company plc, in the amount of
GBP86.3 million, stemming from a breach of Article 56A of CRC`s
articles of association.
Further Cautionary Announcement
Metorex shareholders are advised that Metorex remains involved in
negotiations which may have an effect on the price of the
Company`s securities. Accordingly, shareholders should continue
to exercise caution when dealing in their Metorex securities
until a further announcement is made.
For further enquiries please contact:
Metorex CEO, Terence Goodlace Tel: 011 880 3155
CFO, Maritz Smith
College Hill Jacques de Bie Tel: 011 447 3030
Johannesburg
11 May 2009
Sponsor
Barnard Jacobs Mellet Corporate Finance (Pty) Limited
Date: 11/05/2009 07:30:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS. |
Back to SENS list
